China Tests CO2 Emissions Markets Before Tax, NDRC Official Says

By Nicholas Wadhams and Mathew Carr -
Oct 17, 2013

China, the top greenhouse-gas
emitter, will continue to test carbon markets and may consider a
tax at a later stage to reduce pollution levels, according to a
National Development & Reform Commission official.

Seven pilot programs for markets are going “pretty good,”
Jiang Zhaoli, head of climate change at NDRC, said yesterday at
a briefing in Beijing, without being more specific.

China is seeking to cut emissions per unit of economic
output by at least 40 percent by 2020 from 2005 levels. The
Intergovernmental Panel on Climate Change said Sept. 27 there’s
enough space in the atmosphere for about 309 billion metric tons
of carbon, or about 22 years of emissions at current levels, for
a chance to prevent runaway climate change. United Nations
envoys are seeking to seal a climate agreement by 2015 that
would curb emissions from 2020.

“Carbon trading is a very good tool for China to reduce
emissions right now,” Jiang said. “The carbon tax, I believe,
is also an important tool but the current conditions are not
mature enough to launch this policy.”

China may introduce a tax on emissions as part of
environmental protection charges, Xinhua reported Feb. 19,
citing Jia Chen, head of the Ministry of Finance tax department.

“We hope from international experience and from our pilots
to discover whether we should have a carbon tax or carbon
trading or both,” Jiang said. “This is what we are considering
at the moment.”

Carbon markets are about 94 percent cheaper at cutting
greenhouse gases than renewable subsidies paid to power
producers, the Organization for Economic Cooperation and
Development said Oct. 9 in a report.

The U.K. this year imposed a carbon price floor support tax
to help spur investment in nuclear energy, even as its factories
and power stations participate in the European Union carbon
market, the world’s biggest. Sweden and British Columbia in
Canada are among other jurisdictions with taxes.